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How Our Prius Paid For Itself And Put $10,000 Back In Our Pocket

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"How Our Prius Paid For Itself And Put $10,000 Back In Our Pocket"

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by Randy Essex, via Rocky Mountain Institute

Our 2006 Prius topped 100,000 miles last weekend as we drove on Interstate 70 through Colorado’s Glenwood Canyon, prompting my wife and me to wonder how much money we’ve saved. The result, calculated conservatively, is an eye-popping $34,441—most of which comes from becoming a one-car family living in an urban core when we bought the Prius. That’s $10,000 beyond the sticker price of the car, so we could say we got a free car and paid for some nice vacations.

Here’s how it happened.

In March 2006, I started work at the Detroit Free Press, moving from Des Moines, Iowa. I had always lived inside the city whose name appeared on the newspaper where I worked, disdaining the idea of suburbs and sprawl. I had about a 15-minute drive to work in Des Moines—a local joke being that everything there was a 15-minute drive. I also was struck in my 18 years in Des Moines by the folly of sprawl, paving over farmland ever farther away from the core of a pleasant, safe city, creating unnecessary commutes, wasting time, money, land, and fuel.

In Detroit, Angye and I moved into a high-rise apartment downtown, less than a mile from my job. We were paying for two parking spaces and my car was sitting most of the time during the week because I walked to work or took the funky People Mover, an elevated train on a 3-mile loop.

We each had a Toyota Corolla and admired the technology and fuel economy of the Prius. “What if,” we asked after we had been in Detroit about a month, “we traded in both of our Corollas for a Prius?” About a week later, we felt like we were in a spaceship as we pulled our “super white” Prius onto Southfield Road. (This is not meant as a Toyota endorsement. It’s great to see many companies producing fuel-efficient cars these days and pushing new technologies.)

We had to make some adjustments—most having more to do with the oddities of living in Detroit, which lacks full-service grocery stores in the city limits and effective mass transit throughout the metro area—but never were inconvenienced. In fact, we walked home from baseball games, concerts, and festivals giddy that we weren’t sitting in bumper-to-bumper traffic.

I typically did not have access to a car during the day, but never was deprived. My dentist, barber, bank, favorite restaurants, and most other routine stops were within walking distance or a 50-cent People Mover ride. We planned weekend shopping trips for groceries, hardware, clothing, and other needs—trips that we likely otherwise would have taken separately. Having only one car added to our togetherness and our feel for our neighborhood.

In November, we moved to Basalt, Colorado, so I could work at RMI. We live six miles from work, and I wondered how it would be with one car. The answer is that it’s no different. Now that it’s warm, I can bike or run to work, and the mass transit options in the rural Roaring Fork Valley actually are better than in metro Detroit.

Before RMI’s Reinventing Fire was written, we were among the people living its recommendations for using autos more productively. “We can eliminate the need for many trips entirely, and we can use vehicles in smarter ways, improving access to places or goods with fewer, shorter, or faster trips. …” the book says. “We must explode a deeply held myth—that efforts to reduce travel inevitably take away cherished freedoms, choices, and mobility.”

Rather than lost freedoms, my outcomes were reduced stress from less time commuting, more time with my wife, and greater connection to community. Humans see and experience things around them much more richly on foot or by bicycle than in a car. Looking at our savings over six years—much more than we expected—it seems that if families can save a few thousand dollars a year along with hours of time by living closer to work and driving less, we can create demand to rebuild our cities into closer-knit, sustainable communities as we cut our dependence on oil and reduce environmental damage. That’s a better life.

Here’s a detailed look at the savings shown in the accompanying graphic:

I assumed an average cost of gas at $3 a gallon. The U.S. average from when we bought our Prius in April 2006 until it hit 100,000 miles on March 25, 2012, comes out to $2.93, but prices in both Detroit and Basalt typically run above the national average. My other assumption was that our second car would have been one of the Corollas we traded in, which averaged about 32 miles per gallon.

  • I conservatively estimate that had my wife and I each had a car, we would have put 10,500 miles a year on each. (The U.S. average is 13,476.) Based on the 10,500-mile estimate, we reduced our vehicle miles traveled over the six years by 26,000 total. Savings: $2,437 for 812 gallons of gas we didn’t have to buy.
  • Better yet, the Prius gets a year-round average of 45 mpg, allowing us to cover the 100,000 miles with 903 gallons less fuel than with the Corollas. Savings: $2,709
  • Insurance is pricy in downtown Detroit. My agent there tells me a second car would have cost $140 a month to insure. Then I calculated $50 a month for a second car in Basalt. Savings: $9,630
  • As urban dwellers, with one car versus two, we saved on a parking space at about $75 a month for the 67 months we had the Prius in Detroit. Savings: $5,025
  • We had only one car payment instead of two, and, after paying the loan, the Prius is worth about as much on the market today as both of our Corollas would be together. One of our Corollas wasn’t paid off when we traded it, so we’ll calculate that we avoided 36 payments at $240 a month. Savings: $8,640
  • I estimated $1,000 a year, on average, for routine maintenance, including tires, which aren’t bought every year. Savings: $6,000
  • TOTAL SAVINGS: $34,441

(Individual results would of course vary. Urban parking and insurance costs are higher than for many Americans, but most Americans don’t have two cars that get 32 mpg and many would have more costs in vehicle payments than calculated here. )

Randy Essex is Editorial Director of the Rocky Mountain Institute. This piece was originally published at RMI and was re-printed with permission.

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11 Responses to How Our Prius Paid For Itself And Put $10,000 Back In Our Pocket

  1. Davos says:

    Is it just me..? Or does a second-read of the article show the bulk of the savings arriving by alternative life choices (like going from 2 cars to 1) rather than the physical Prius itself?

    You might as well add in all the ‘indirect’ savings that these studies have been showing too… As in “prevented 34.5 cases of cancer”, “extended 43.4 years of human life”, etc. etc.

    • prokaryotes says:

      Well, but besides only a single car, all members of the family had to drive anyway. Though actually the amount of cars is not very much relevant. They could own 3 cars but only drive little with car 2 and 3. Ofc, you save up on insurances too. However, i think the point here is that you can still drive a lot, but with a much better MPG ratio, you have win.

  2. Chris Lock says:

    Davos, I agree with your analysis. Savings in the article could also include the decrease in CO2 emissions.

    I don’t have a car at all and rely on public transportation. Here in Vancouver that is almost easy. I live at the boundary of Vancouver and the sprawl. Unfortunately, house prices here (and many places) prevent mere mortals from buying a house close to town and surviving on one car. I live alone on the edge of town in an apartment; there is no way a new family can afford a million dollar house in Vancouver. It is cheaper for a new family to run two cars and live in the sprawl.

  3. fj says:

    Laughable. Any vehicle that is too heavy and large to be powered by human power is probably a very bad design and way too expensive with much too large an environmental footprint.

    • Ric Merritt says:

      Darn tootin. Inventing diabolical technologies like donkey carts and plows drawn by bullocks is what got the human race into the technological bind we find ourselves in today. :)

      • fj says:

        Actually, according to Jared Diamond in his “Guns, Germs, and Steel,” large beasts of burden advanced civilization terrifically; though this idea has mistakenly been carried over to current awful transport practice.

        Using extremely wasteful oversized vehicles and the large wasteful power sources they require are a very wasteful and long outdated model for transporting people as if we should all have rooms in our homes set aside for mainframe computers or have to carry large mobile phones in backpacks or trucks; really primitive stuff as if we still require donkeys and bullocks for human mobility.

  4. LosAngelista says:

    I was leasing a luxury car for my business and switched to a Prius four years ago. I save about $200/mo on my lease payment since the Prius is a cheaper car and my operating costs are about $200/mo less as well since my gas mileage has more than doubled and I’m buying regular rather than premium gas. Maintenace and insurance are less with the Prius too. I don’t miss anything about the luxury car so the switch was a total win for me. I only wish I had done it sooner.

    • In a number of ways, I’ve long felt the Prius itself (G2 & G3 at least) gives a luxury travel experience – smooth and quiet, partly due to part-electric propulsion, and partly due to extra noise-reduction engineering so it’s unobtrusive when the gas engine kicks in. Leather seats and maximum electronics are available as options if you want ‘em.

      Most of the time I’ve driven our 2006 – esp. whenever gas prices are high – calcs have shown it would resell for more than what would have been left on an auto loan. Finance a purchase, make the payments, save on gas money, drive in luxury, and retain net residual value.

      All you need is an adequate credit score to get into some pretty reasonable personal transport and come out personally ahead, at least in the twisted but pervasive terms of contemporary U.S. society.

      And of course, then drive it as little as possible, and ride-share (esp. with someone you love!) when you do have to drive.

  5. Victor matheson says:

    I have a Prius, and I love the car, but this article is laughable. Randy could have replaced his two Corollas with one 18 mpg Crown Vic and still come out way ahead. 90% of the savings comes from moving to 1 car regardless of the mileage of that car, yet the headline touts how the Prius paid for itself. Climate progress does itself no favors publishing wildly deceptive articles like this.

    • W Scott Lincoln says:

      After reading the article, it was pretty clear that they were discussing how the life change from 2 Corollas to 1 Prius were both responsible for the savings. Perhaps would have been more clear if the author had alluded to this more in the intro paragraph or the title, but by reading the entire article it seemed pretty clear that it wasn’t just the Prius.

      Because most of us probably are not already averaging low 30s for MPG on our vehicle(s), our gas savings would probably be higher, as noted by the author.